Introduction

Navigating the modern music industry demands innovation in revenue generation. As an emerging artist, diversifying income sources beyond traditional avenues is necessary. This week’s entry explores 3 innovative strategies & platforms that enable artists to expand their financial horizons while creating more meaningful connections with their audience. It’s exciting to see that some of these platforms intersect with one another, a sign that release strategies are evolving. 

*Please note that we are not affiliated or sponsored by any of the below mentioned companies.

Monetization Strategies:

1. Fractional Royalties

Fractional royalties, also known as fan-funded royalties or music investment, involve allowing fans or investors to purchase a share of an artist's royalties from their music catalog or specific songs. This innovative approach enables fans to invest in an artist's success and potentially earn returns based on the music's performance. This investment provides immediate capital to the artist, allowing them to fund their music projects, tours, or other creative endeavors. 

By offering fractional royalties, artists agree to share a portion of their future earnings with investors over a predetermined period. This arrangement allows artists to access immediate funding while potentially sacrificing some future income generated by their music. Offering fractional royalties can also lead to increased engagement and support from fans. This can result in a more dedicated fan base, leading to increased music sales, concert attendance, or merchandise purchases, indirectly contributing to an artist's overall revenue.

Royal.io was founded in May 2021 by Justin Blau, who is popularly known as 3LAU. The company is backed by musicians such as The Chainsmokers, Logic, and Kygo. It is a marketplace that enables anyone to invest in music and earn royalties alongside artists. They believe that the future of the music industry is one where fans and artists co-own music and participate in the financial upside together. Royal allows artists to retain independence and creative control as fans fuel their careers.

It's important to note that while offering fractional royalties can provide immediate financial support and engage fans in the artist's success, it involves sharing future earnings. Artists should carefully consider the implications of such agreements on their long-term financial flexibility and revenue sustainability. Additionally, the revenue generated through fractional royalties might vary based on the success and popularity of an artist's music.

Other platforms: ANote Music Songvest CoRite Fanvestor 

2. Super fan engagement + monetization

Bundling music with merchandise as a pre-release strategy targets dedicated fans who are willing to invest in exclusive experiences or items associated with an artist's upcoming music release. This approach not only generates revenue but also fosters a deeper connection between artists and their super fans. 

EVEN is a platform focused on enabling artists to bundle exclusive experiences with their music releases. Users can purchase special offers, such as early access to albums or unique merchandise. The platform has boasted success stories of artists accelerating their revenue, enabling them not only to recoup but also to profit from their music prior to the official commercial release. It serves as a pre-launch strategy, likened to a consumer paying to see a film in the movie theater before it becomes available on Netflix. Essentially, fans get direct access first! EVEN doesn’t aim to replace DSPs but instead intends to assist artists in generating more revenue by offering unique experiences that complement the traditional release methods. The platform is currently in the BETA stage, with an official launch targeted for March 2024.

It's crucial for artists to choose platforms based on their reach, terms, and ability to effectively engage their fanbase. While bundling music with merchandise can be a lucrative strategy, artists should consider balancing exclusivity with accessibility to ensure they are reaching a broad spectrum of fans while rewarding their dedicated supporters. Additionally, as the landscape of online platforms evolves, artists may find new opportunities to explore bundling strategies to engage their audience.

Other platforms: Bandcamp

3. Blockchain Monetization

Releasing music on a blockchain offers several significant advantages and opportunities for artists in the modern music industry. This approach provides artists with greater control over their work, transparency in revenue distribution, enhanced copyright protection, and opportunities for new forms of engagement and monetization. It empowers artists in navigating a more equitable and transparent landscape within the music industry.

Audius is a decentralized music-sharing and streaming platform that leverages blockchain technology to offer a platform for artists to release their music directly to their audience. Audius provides various avenues for artists to monetize their music on the platform.  Here are key points about Audius’ monetization capabilities  and how it utilizes blockchain:

• Decentralized Platform: Audius operates as a decentralized protocol, meaning it doesn't rely on a central authority or server to manage content. Instead, it uses blockchain technology to distribute content across a network of nodes, ensuring data integrity, security, and censorship resistance.

• Direct Artist Uploads: Artists can directly upload their music to Audius without intermediaries like record labels or streaming services. This allows artists to maintain control over their content, distribution, and royalties.

• Blockchain for Transparency: Audius uses blockchain technology, specifically a blockchain-based protocol called Solana, to ensure transparency in the music distribution process. Blockchain records all transactions, ensuring that artists receive fair compensation and royalties without third-party interference.

• Content Monetization and Token Economy: Audius integrates a token economy, utilizing its native token called $AUDIO. Artists and listeners can earn $AUDIO tokens for various actions, such as streaming, curating playlists, or promoting content. These tokens can be traded or used within the platform's ecosystem.

• Community Governance: Audius incorporates community-driven governance, where token holders can participate in decision-making processes related to platform development, features, and governance decisions.

• Censorship Resistance: Due to its decentralized nature, Audius is more resistant to censorship compared to traditional centralized platforms. Content remains on the network unless removed by the artist or consensus of the community.

• User Experience: Audius aims to provide a user-friendly experience similar to popular streaming platforms, making it accessible for both artists and listeners.

• Fair Distribution and Copyright Protection: The use of blockchain in Audius helps in tracing ownership and rights, potentially addressing copyright issues by attributing ownership clearly and facilitating fair distribution of royalties to artists.

Here are some ways in which Audius facilitates monetization for artists:

• Direct Streaming Revenue: Artists earn streaming revenue based on the number of plays their tracks receive on Audius. This revenue is generated through advertising and subscriptions on the platform.

• $AUDIO Token Rewards: Audius operates on a token economy with its native token called $AUDIO. Artists can earn $AUDIO tokens based on the engagement and popularity of their tracks. These tokens hold value and can be traded or used within the platform's ecosystem.

• Creator Staking: Audius allows artists to stake $AUDIO tokens to promote their content. This means that by locking a certain amount of $AUDIO tokens, artists can boost visibility for their tracks on the platform, potentially leading to increased plays and revenue.

• Exclusive Releases and NFTs: Artists can offer exclusive content, special releases, or limited edition tracks as Non-Fungible Tokens (NFTs) on Audius. Fans can purchase these unique digital collectibles, allowing artists to monetize their music in new and creative ways.

• Direct Fan Support: Audius enables direct support from fans through features like tips or donations. Fans can support their favorite artists by tipping them directly with $AUDIO tokens or other digital currencies.

• Merchandising and Exclusive Content: Artists can link their Audius profile to external merchandise or exclusive content platforms, allowing them to sell merchandise or offer special content directly to their fanbase.

• Community Engagement: Audius encourages community engagement and incentivizes artists who actively participate in engaging their audience. Active interaction, playlist curation, and community involvement can lead to increased visibility and potentially higher earnings.

It's important to note that while Audius offers multiple avenues for artists to monetize their music, the actual earnings can vary based on the popularity of the artist, the engagement of their audience, and the overall performance of their tracks on the platform. Additionally, the value of $AUDIO tokens and the token-based rewards may fluctuate based on market conditions. Overall, Audius represents a shift toward a more artist-centric and decentralized model in the music industry, offering artists a platform to share their music directly with fans, maintain control over their content, and potentially earn revenue through the token economy and fair royalty distribution facilitated by blockchain technology.

Other platforms: Sound, Ujo, OMI

This comprehensive manual offers various innovative ways for emerging artists to generate revenue, providing diverse options for effective monetization in the music industry. By embracing these strategies, artists can expand income sources, strengthen connections with their fanbase, and empower their artistic journey toward financial sustainability in the dynamic music landscape. If you’re interested in exploring any of these innovative strategies, the B.A.K team is here to help!